Loan Payment Calculator
Estimate monthly loan payment using annuity formula.
Loan Calculator Guide
Types of loans: There are consumer loans (for goods and services), mortgage loans (for real estate), and business investment loans. Each type has different terms, repayment periods, and security requirements.
APR (Annual Percentage Rate): This is the key comparison metric that includes not only the nominal interest rate but also all additional costs: commissions, insurance, application fees. Lower APR means cheaper credit. Note: APR can be misleading for very short-term loans where one-time fees have a big impact on the annual rate.
Equal vs decreasing installments: With equal (annuity) payments, you pay the same amount monthly throughout the loan term. Initially, most of the payment is interest, and principal grows slowly. With decreasing installments, the payment amount decreases over time - you pay more initially but the total interest cost is lower. Decreasing installments are better for higher income and planning early repayment.
What to watch for: Always check the total cost of credit, not just the monthly payment. Ensure the bank offers early repayment without penalties. Pay attention to variable interest rates (risky when rates rise) vs fixed (more expensive but safer). Compare offers from multiple banks and watch for ancillary costs.